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Chinese Photovoltaic Market
Frost & Sullivan, April 2011, Pages: 82
Strong Government Support Ensures Fast-track Growth for the Chinese Photovoltaic Market
The Chinese photovoltaic market is expected to continue to witness steady growth from 2011 to 2017. The development of the Chinese solar power market is heavily dependent on demand from the international market. Nearly 90 percent of photovoltaic products made in China are consumed by the international market, represented by Germany, Spain, and other European countries. To reduce dependency on the international market, the Chinese Government is taking positive action to encourage the growth of the domestic market. In addition to the allowances and subsidies, the government is trying to formulate more perfect feed-in-tariff policies and speed up grid construction to provide photovoltaic projects with grid connection convenience. The installed capacity is estimated to grow at a compound annual growth rate (CAGR) of 60.9 percent from 2010 to 2017. This high growth rate is largely due to strong governmental policies to strongly encourage the use of solar power. “The growth rate for total revenue and installed capacity for Chinese photovoltaic market is mainly decided by the three different sub-segmented markets: crystalline silicon market, thin-film market, and concentrator silicon market,” notes the analyst of his research service. “Total revenue and installed capacity is projected to be steeply increasing but with gradually shrinking growth rate; the market share is estimated to be gradually taken by thin-film and concentrator silicon technologies from traditional crystalline silicon technology.”
Fossil fuel reserves are depleting rapidly and rising awareness levels among the public is driving the gravitation toward renewable energy. Multiple environmental problems such as greenhouse gas emissions have resulted as a fallout of industrial development. Solar energy can be an unlimited resource and China has it in abundance, especially in the southwest area. This, hence, is the major focus of the Chinese solar power market.
Intense Competition Proves to be Growth Bottleneck for Market
Fierce competition in the domestic market seriously dampens the revenue growth at present in China. In order to get the initiative of this emerging market in China and build their brand strength, system installers are willing to win the bid for photovoltaic projects through reducing the on-grid price for photovoltaic (namely the bidding price for projects) to unreasonably low levels. Installers are barely able to earn profit through these projects and market confusion results. Chinese photovoltaic market participants that are willing to fully cover the value chain include Yingli Green Energy Holding Company Limited and LDK Solar Co., Ltd. Most Chinese enterprises are focusing on solar wafer, cell and module manufacturing. There are about 510 enterprises in this section of the value chain.
Price sensitivity is high in this market owing to technology improvements and high sensitivity of raw materials. Innovation in existing technologies will be highly effective in reducing costs. High-grade crystalline silicon is still on the import list for Chinese manufacturers; hence, they have no control over pricing of this material. “The highest percentage of profit is earned by upstream participants in the value chain, namely feedstock manufacturers,” says the analyst. “Fully covering the value chain for the photovoltaic industry can effectively reduce the production costs and dependence on the feedstock suppliers so that enterprises obtain greater freedom to establish their developing strategies.”
Market Sectors
Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:
By Product Type:
- On-grid systems
- Off-grid systems
- Technologies
The following technologies are covered in this research:
- Crystalline silicon
- Thin-film
- Concentrator silicon
This Frost & Sullivan research service titled Chinese Photovoltaic Market provides revenue analysis, market share analysis, competitive structure, industry challenges, market drivers and restraints, and pricing trends. In this research, Frost & Sullivan's expert analysts thoroughly examine the following technologies: crystalline silicon, thin-film, and concentrator silicon.
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